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The number of TV households with free or pay TV access to UHD linear channels marked a turning point in 2018 according to the latest analysis of UHD channel carriage by IHS Markit. In 8 of the 28 countries where pay TV operators provide linear UHD channels as part of a package, at least one-quarter of TV households have access to linear UHD content. Portugal has the highest penetration of linear UHD content availability, where 82% of TV households may receive a linear UHD broadcast as part of their pay TV package.

France and Russia are the only countries with more than 25 million TV households and linear UHD penetration of greater than 25% of total homes. By comparison, linear UHD penetration of TV households was 20% in the UK, 16% in the US, and 15% in India by the end of 2018. The global average UHD pay TV linear channel availability of the surveyed 652 million TV households across all 28 territories reached 18% over the same period.

South Korea and the Netherlands have the most pay TV operators offering linear UHD pay TV channels: 6 in South Korea, 5 in the Netherlands, 3 in France, India and Portugal whilst there was an average of two pay TV operators in each of the 28 countries where linear UHD pay TV channels are available.

Our analysis

The deployment of UHD channels is very similar to the way broadcasters and pay TV channels introduced HD. UHD enables pay TV operators to distinguish their channel offering by picture quality. Pay TV operators may charge a premium for the superior quality of UHD over HD channels like how HD was marketed against SD. IHS Markit believes this differentiation strategy will yield success for UHD in the same way it was successfully implemented for HD.

UHD is a step up in resolution on HD just like HD compares to SD. Therefore, as the amount of UHD content increases, subscribers are expected to transition their viewing from HD to UHD programming. As such, this presents an opportunity for advertisers to reach out to these tech savvy households who can afford a UHD set and subscribe to a pay TV service offering UHD content.

The emergence of UHD content provides a new promotional channel to attract subscribers to a pay TV service. Given pay TV linear channel subscriptions are on the decline in many countries, UHD formatted linear pay TV channels provide a tool to fight cord-cutting. In the US, however, UHD channel owners are likely to use UHD as a tool to continue the normal high single-digit growth in carriage fees for their channels. For countries with lower carriage fees – and similarly lower monthly TV ARPUs – the introduction of pay TV linear UHD channels will be an opportunity to grow ARPU.

UHD also presents a similar opportunity for SVOD providers to charge a premium for their UHD content. SVOD services have been early adopters of the UHD format, notably global online video leader Netflix which offers UHD on the two most expensive of its four service tiers, in the US. IHS Markit believes that price increases are inevitable, with the industry already witnessing several notable price increases in recent years. This impact will be significant as SVOD providers become the dominant form of viewing video content worldwide. In 2023, 54% of all aggregate video subscriptions (cable, satellite, IPTV, virtual Pay TV, and online video) will be to online subscription video services.

However, the success of UHD as a format hinges upon the ability to deliver compelling content to consumers. Nature shows, sports, and live events are the current staple for UHD linear channels. To become mainstream, IHS Markit expects UHD content will extend to a steady supply of first-run content (drama, comedy, reality, etc.) that flows through linear TV and SVOD services in the near future.